Missing Link Friday – 13 January 2012

The missing liberals: Why is there no liberal party? Because there are so few people who support both economic and social liberal causes, says Andrew Norton. Andrew cites data from the 2010 Australian Election Survey.

Dr Watson vs Dr Ludd: With access to huge databases, expert systems will soon be able to diagnose illness better than doctors, says Alex Tabarrok. Not everyone is convinced.

Penalty rate claims hard to swallow: "To believe that Mr Calombaris would open his restaurants on Sundays only to have them run at a loss is to believe that he’s running some sort of altruistic quasi-charity, an impression he attempts to give by suggesting that he opens on Sundays for reasons of ‘tourism’." Matt Cowgill.

Game of thrones: Greg Jericho is tired of reading about leadership challenges.

Adult content? "I can never understand how it’s ok to see images of a woman with breasts larger than her head, but a tasteful picture of something so natural as breastfeeding is ‘offensive’ to those same people." The Happy Sorceress on the Dave Dorman controversy (via Blue Milk).

Why Boardwalk Empire is more like cinema than tv: "In recent years, television shows have increasingly adopted cinematic tropes. Some of these can be found in current television series, nevertheless Boardwalk Empire is the pinnacle of this trend." I Heart the Talkies.

Equality means never having to drink warm beer: LG’s new ‘blast chiller’ compartment can cool a can of beer in five minutes. But to get this feature you have to buy a fridge that costs more that $2,500. Even super-rich people don’t buy refrigerators by the dozen so according to Matthew Yglesias that means "the incentive to invest money in developing even better appliances is relatively muted." He suggests that rising middle class incomes would encourage appliance makers to introduce more of these kinds of features.

Fairness on a budget: Britain’s Attlee government of 1945-51 built the modern welfare state and delivered greater income equality even though it inherited a debt to GDP ratio three times today’s level, writes Chris Dillow. So why is it so hard to implement egalitarian policies today?

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40 Responses to Missing Link Friday – 13 January 2012

  1. Judith Sloan says:

    Matt Cowgill, whose figures on the Sunday rates for wait staff under the Restaurant Award are actually wrong (arithmetic may not be his strong suit), obviously does not understand much about business or economics.

    As long as George covers his variable costs, then it makes sense for him to open from an economics perspective. This does not mean he is making a profit. From a business sense, there may be a strong marketing reason to open on Sundays – to make sure customers will come know that the restaurant is “open for business”.

    One of my friends ran a camping business – now no longer – and he opened on Sundays, working himself to economise on staff costs, but made a loss on that day. But people did their market research on that day and some returned during the week to make their purchases. His view was that had he not been open on Sunday – even though he made a loss on that day – (people expected him to be open), he would not have secured these purchases. Not altruism but a desparate business tactic. And as I said, the business is now more, driven out by high labour costs and difficulty of competing with on-line purchashing from overseas (no penalty rates there).

    I also love the fact that Matt thinks $30 per hour on Sundays is OK! Be it a high end restaurant or the local cafe.

  2. desipis says:

    I could be missing something, but I thought part of the point of penalty rates was to make certainly levels of business activity not financially viable on weekends/public holidays. An apparent economic loss that is justified by the social and economic benefits of a common 5 day working week.

    And as I said, the business is now more, driven out by high labour costs and difficulty of competing with on-line purchashing from overseas (no penalty rates there).

    Are you aware there are no laws in Australia that force payment of penalty rates to web-servers? Also, I haven’t noticed a lack of camping shops, so perhaps that was just a case of the market correcting itself for efficiency.

  3. Pedro says:

    “I could be missing something, but I thought part of the point of penalty rates was to make certainly levels of business activity not financially viable on weekends/public holidays.”

    Ditto for trading hour restrictions. You WILL

  4. Pedro says:

    … respect the sabbath! (Stupid keyboard.)

  5. Don Arthur says:

    Judith – Whenever an Australian business person is accused of wanting to make a profit, they carry on like an evangelical pastor who’s been caught leaving a brothel.

    Why do they always justify attempts to lower their wages bill or charge higher margins by arguing that it’s all motivated by concern for workers, customers or the country?

    And why all this guff about costs? If you operate in a competitive marketplace and follow the rules, what’s wrong with trying to increase your margins?

    Is there something shameful about making a profit?

  6. JB Cairns says:

    Judith is saying someone else is bad as her at understnding data? found out about MYEFO yet?

    I have a good friend who works nightfill at Woolworths whilst completing his post-graduate studies. They get nothing extra on friday night and a 25% loading for the two hours before midnight on Saturday night in stores which finish at midnight.

    They struggle to get workers on the weekend. Perhaps Woolworths should ring Judith up and ask her for answers.

    Unless workers are paid accordingly then they will not work on the week-ends. Privileged elites like Judith can bleat all they like but that is what happens.
    Why so these people always miss on what happens at the supply side?

  7. hammygar says:

    “Is there something shameful about making a profit?”

    Only if exceeds the real cost of funding capital (ie the long term bond rate). If so it becomes exploitation. Most profitable businesses in the West are guilty of this.

  8. Judith Sloan says:

    Well, it is funny that you should mention Woolworths because they operate an enteprise agreement that would not meet the Fair Work Act BOOT and there are some real issues about the new agreement that needs to be negotiated this year.

    The reason for the low penalties (although higher base rates of pay compared with the award) is that the SDA has traded off conditions at Woolworth and Coles supermarkets for union preference clauses. Most of SDA membership comes from large companies.

    I am all for companies paying the supply price but this will not be a one-size-fits-all figure Australia wide.

  9. Tel says:

    hammygar: which long term bond rate is the “official” one that defines exploitation?

  10. JB Cairns says:

    We are still waiting for you to show how Cowgill was wrong.This is usually done when a stememnt like that is made however given your your problems with MEFEO I am sceptical.

    I will have to ask him about union preference deals.

    Young people will always demand a high premium to work on the weekends. They play sport, party etc then. If you do not pay them then they will always prefer to work during the week.

  11. Don Arthur says:

    When employers aren’t willing to pay a wage high enough to attract suitable staff they complain about skill shortages or ‘job snobs’.

    When they complain about penalty rates it’s usually because they think they could attract suitable staff for less money.

    As Judith says, you’d expect that the amount employers would need to offer in order to persuade people to work Sundays and public holidays would vary depending on the local labour market.

  12. Tel says:

    When employers aren’t willing to pay a wage high enough to attract suitable staff they complain about skill shortages or ‘job snobs’.

    Egats, I’m agreeing with Don Arthur for a change… but yeah, if you don’t believe in proscribed wages then by definition you also don’t believe in skills shortages. Mind you, if there’s a chance to pick up a bonus by whining and hand wringing then I suppose it doesn’t hurt to try. OK, it hurts one’s credibility but who can put a price on credibility huh?

  13. Yobbo says:

    It’s not as simple as just raising wages when there is an actual skills shortage. There are only a finite number of people in Australia with x skill. When you run out of them (as happened back in the dot com boom and is happening now with mining), the time to get more is 6-7 years even after the wage hike, since that’s how long it takes people to start graduating from Uni.

  14. Yobbo says:

    That’s why when you hear employers talk about skill shortages, it is usually in the context of immigration policy. They want workers now, not in 7-10 years time.

  15. conrad says:

    Yobbo,

    I can’t remember a time when Australian industry groups wern’t complaining about skills shortages, usually without any basis apart from wages. For example, if I remember correctly, mining employs about 200K people directly, which is not a thrilling amount. So are these real shortages, or is it just expensive to put people in the places where it is 42c, there is no accomodation, and get them to do a very hard job?

  16. Matt Cowgill says:

    Judith,

    You say that my the rates in my table showing Sunday wages for waitstaff are wrong.

    I confess that I cannot see the error.

    For example, clause 20 of the award (http://www.fwa.gov.au/documents/modern_awards/award/ma000119/ma000119-24.htm#P319_29097) says that the minimum hourly wage for ordinary hours for permanent staff at level 1 is $15.96.

    Clause 34 of the award (http://www.fwa.gov.au/documents/modern_awards/award/ma000119/ma000119-39.htm#P647_53982) says that full time and part time staff will be entitled to 150% of the ordinary time rate if they work on Sunday, while casual staff will be entitled to 175% of the ordinary time base rate.

    By my calculations, $15.96 * 1.5 = $23.94 and $15.96 * 1.75 = $27.93. My table shows these figures.

    Perhaps arithmetic is not my strong suit, but I would appreciate it if you could either:
    a) point out to me the error in the above calculations; or
    b) confirm that in fact the numbers in my post are correct.

    Thanks

  17. Mr Denmore says:

    How typical of a Murdoch employee is Judith Sloan in trashing Matt Cowgill’s professional bonafides without saying how he is supposedly wrong. One supposes it takes a mercenary hack to recognize one.

  18. Matt Cowgill says:

    Judith,
    You also suggest that “here may be a strong marketing reason to open on Sundays – to make sure customers will come know that the restaurant is “open for business””. You imply that my failure to acknowledge such a possibility shows that I do not understand much about economics.

    I believe you have overlooked the final sentence of the second paragraph of my post:
    “he might choose to run at a loss on Sundays in order to build brand loyalty and increase his custom on other days of the week; the total return to opening on Sundays would therefore presumably make it worth his while”.

    Matt.

  19. Judith Sloan says:

    The real issue is whether the penalty rates are exclusive or inclusive of the casual premium of 25 per cent. When I rang through to the Fair Work Ombudsman, the response was that penalty rates are inclusive of the premium. So inflate the base rate by 25 per cent and apply the penaty rate on that amount – a penalty on a penalty, in effect. The way the award is written it is quite ambiguous – which is itself ironic for a Modern Award.

    In any case, an hourly wage rate in excess of $30 per hour for Sundays and $40 for public holidays looks very high, for relatively unskilled work.

    Now, Mr Denmore, I don’t need to be a mercenary hack to state my views; as anyone who has knows me would tell you, I have been saying these things – arguing against the award system, for instance – for many years. And, God forbid, I used to write for Fairfax and said the same things there.

    But the absence of civil discourse and courtesy on this site encourages me to take my bat and ball and go home. So farewell.

    By the way, I agree with the discussion about skill shortages. Employers getting the person they want at the price they want to pay on Monday is not a skill shortage. Relative wages should be bid up. Our immigration policy thwarts this market mechanism and denies opportunties for locals to respond to incentives, including by training.

  20. Matt Cowgill says:

    On the question of whether the penalty rates are inclusive or exclusive of the 25% casual loading, my reading of clause 34 is that the casual loading is including in the penalty rates. The table in that clause (http://www.fwa.gov.au/documents/modern_awards/award/ma000119/ma000119-39.htm#P647_53982) sets out different penalties for casual and non-casual staff. I don’t see how there is room for ambiguity on this point.

    On the “absence of civil discourse and courtesy on this site”, I note that in the first comment to this post, you:

    1) Suggested that arithmetic may not be my strong suit;
    2) Suggested that I do not understand business and economics; and
    3) Claimed that my calculations were incorrect, without explaining or substantiating this assertion.

    I will leave it to others to judge where the lack of civil courtesy is coming from.

  21. Matt Cowgill says:

    * that should’ve been ‘included’, not ‘including’, obviously.

    When I say that penalties are inclusive of the casual loading, I mean that the penalty is applied to the base rate (the minimum wage for permanent staff) and there is no additional loading for casual employees. I think this is quite clear in the table in clause 34 of the award, linked to above.

  22. Robert says:

    One of my friends ran a camping business – now no longer – and he opened on Sundays, working himself to economise on staff costs

    Working?! In a shop?! How barbaric.

    Then again, it was Sunday, and I can understand why people would be loathe to work such antisocial hours.

  23. conrad says:

    “But the absence of civil discourse and courtesy on this site encourages me to take my bat and ball and go home.”

    As someone that posts on Catallaxy, that’s a very strange comment.

  24. Dan says:

    It’s okay when right-wingers are horrible.

  25. Bill Posters says:

    But the absence of civil discourse and courtesy on this site encourages me to take my bat and ball and go home. So farewell.

    Incredible.

  26. Judith Sloan says:

    More than happy to debate the issues with you, Matt.

    But ‘mercenary hack’ is a bridge too far.

    As far as my Catallaxy contributions are concerned, I never involve myself in the sometimes robust, indeed vituperative, comments and arguments. I leave that to others.

    Cheers

  27. Matt Cowgill says:

    I hope you noticed that it wasn’t me who called you a ‘mercenary hack’.

  28. David says:

    There is absolutely no ambiguity on the issue of whether penalty rates are inclusive or exclusive of the casual loading.

    Clause 34 of the award says that employees will be paid “the following percentage of the minimum wage in clause 20″… and then the table in clause 34 specifies the percentages for “Casual (inclusive of 25% casual loading)”.

    The award could hardly be more explicit that the figures include the 25% loading.

  29. Victor Trumper says:

    I am the person who works nightfill at woolworths.

    I have never heard of a Union preference clause whilst working there.

    No-one has ever asked me whether I was a SDA member ( I am) when they were selecting the people who gained employment nor when the roster is written up.

    If there was such a clause I would have thought it would be part of the ‘marketing’ used by the Union to gain membership.

    As I said previously I have never heard of it nor have any of my colleagues or even the union delegates!

    off to cricket now to score

  30. Matt Cowgill says:

    David,
    I was also surprised to discover that there is disagreement on this point. It seems unambiguous to me.
    Matt

  31. Oh really!! says:

    C’mon people, be nice…
    The amount of bullying that is occurring since this “debate” began with G.C. having his say, early in the week is likely to result in someone ” dobbing in a bully”. Matt I am finding your method of communication to be very lucid for the layman( me) thank you. Don’t be drawn into the hogwash if you can resist. Good luck.

  32. Bill Posters says:

    But ‘mercenary hack’ is a bridge too far.

    But “arithmetic may not be his strong suit” and “obviously does not understand much about business or economics” are okay.

    I’d rather be called a mercenary hack, personally. Sounds kinda tuff.

  33. Mr Denmore says:

    And this sensitivity to impolite discourse is from the same woman who on Catallaxy described the Archbishop of Canterbury as a ‘lefty tosser’. Just like the rest of the neo-libertarian right – loves dishing it out but can’t take it.

  34. Dan says:

    Mr [email protected] – my take exactly. Many on the brittle right – such as Judith here – seem to not even have any insight into when they are dishing it out, have trouble apologising, and get their knickers in a knot when they get a serve.

  35. observa says:

    “Britain’s Attlee government of 1945-51 built the modern welfare state and delivered greater income equality even though it inherited a debt to GDP ratio three times today’s level, writes Chris Dillow. So why is it so hard to implement egalitarian policies today?”

    My hunch is the Govt of the day had a population largely amenable to hard times and rationing, rather than decades of well meaning but utterly facile left/green welfarism-
    http://www.adelaidenow.com.au/outback-sa-community-abandoned/story-e6frea6u-1226243937096
    I seriously doubt the Attleee Govt were filled with aging hippiedom indulging in nostalgia for their youth, all at taxpayer expense.

  36. Nice of Judith to demonstrate the problems with journalism today.

  37. Sally says:

    Nice of Judith to demonstrate also why she needs a professional sub-editor before her pieces are published in the Australian.

  38. JB Cairns says:

    Ms Sloan adopts a typical catallaxian double standard.

    She alleges that Mr Cowgill got his arithmetic wrong ( ironic from the gal who can’t counts the pages of work choices!) however refused to show how it was so.

    She then says she rang someone who explained it to her yet Matt shows it is clearly in the legislation.

    She then takes her little red wagon home because of…. She never engages in what?

    What has she called Laura tingle?

    No wonder Judy is getting blonder each day.

    I do see her statement on Woolworth’s was as ‘accurate’ as her other assertions.

    Her knowledge on this area as as ‘good as it is on Sec 412 of the Fair Work act

  39. observa says:

    Well well well, look at the ‘sponsors’ of the modern left green welfare state-
    http://www.remoteindigenousgardens.net/
    And you could bet London to a brick there’d be a predominance of mildly suntanned whitefellas among that lot of backscratchers.
    $800000 of taxpayer hard-earned on that one left green ‘food security’ pecadillo in the desert that no cocky worthy of the name would ever dream of pissing up against the wall.

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